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Can Better Business Bureau help investors?

The nonprofit is teaming up with a foundation run by the brokerage industry’s self-regulator

By

IanSalisbury

The Financial Industry Regulatory Authority has a big mandate: Overseeing the nation’s hundreds of thousands of brokers that help Main Street investors choose investments like annuities and mutual funds.

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What it doesn’t have: a catchy moniker.

“Investors don’t know where to turn when they have a problem,” concedes Gerri Walsh, president of the group’s education foundation. “We’re not a household name.”

As a result, the Finra Education Foundation has launched a joint venture with a brand that almost everyone has heard of — the 100-year-old Better Business Bureau.

Finra, a successor organization to the slightly better-known NASD, is not a government body but an industry group of about 4,000 securities firms charged with handling complaints by customers about brokers and educating investors. That setup has led the group to face skepticism from critics who see it as too accommodating of Wall Street’s interests.

The Better Business Bureau — actually 114 independent bureaus that share a national organization — is also a self-regulatory organization.

The “Smart Investing” site (bbb.org/smart-investing), includes links to some of Finra’s popular features like BrokerCheck, which investors can use to view the criminal and regulatory records of brokers they’re considering hiring, and its mutual fund calculator, which helps small investors understand how fund fees work.

Will it help? Barbara Roper, director of investor protection at the Consumer Federation of America, a group not affiliated with either Finra or the BBB, thinks it could. “Finra’s developed a variety of resources that are potentially valuable,” she says. “A large number of investors aren’t familiar with them.”

The Better Business Bureau isn’t a heavyweight in investing circles, according to Roper. But “it’s obviously a name people recognize in a different context,” she says.

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